This page has been archived and commenting is disabled.

Guest Post: What to Do When - Not If - Inflation Gets Out Of Hand

Tyler Durden's picture


Submitted by Jeff Clark of Casey Research,

The cheek of it! They raised the price of my favorite ice cream.

Actually, they didn't increase the price; they reduced the container size.

I can now only get three servings for the same amount of money that used to give me four, so I'm buying ice cream more often.

Raising prices is one thing. I understand raw-ingredient price rises will be passed on.

But underhandedly reducing the amount they give you… that's another thing entirely. It just doesn't feel… honest.

You've noticed, I'm sure, how much gasoline is going up.

Food costs too are edging up.

My kids' college expenses, up.

Car prices, insurance premiums, household items – a list of necessities I can't go without. Regardless of one's income level or how tough life might get at times, one has to keep spending money on the basics. (This includes ice cream for only some people.)

According to the government, we're supposedly in a low-inflation environment. What happens if price inflation really takes off, reaching high levels – or worse, spirals out of control?

That's not a rhetorical question. Have you considered how you'll deal with rising costs? Are you sure your future income will even keep up with rising inflation?

Be honest: will you have enough savings to rely on? What's your plan?

If price inflation someday takes off – an outcome we honestly see no way around – nobody’s current standard of living can be maintained without an extremely effective plan for keeping up with inflation.

It's not that people won't get raises or cost of living adjustments at work, nor that they will all neglect to accumulate savings.

It's that the value of the dollars those things are in will be losing purchasing power at increasingly rapid rates. It will take more and more currency units to buy the same amount of gas and groceries and tuition. And ice cream.

I'm not talking science fiction here.

When the consequences of runaway debt, out-of-control deficit spending, and money-printing schemes come home to roost, it's not exactly a stretch to believe that high inflation will result.

We need a way to diffuse the impact this will have on our purchasing power. We need a strategy to protect our standard of living.

How will we accomplish this?

I suspect you know my answer, but here's a good example. You've undoubtedly heard about the drought in the Midwest and how it's impacted the corn crop. The price of corn has surged 50% in the past two months alone.

Commodity analysts say the price could rise another 20% or more as the drought continues.

(Click on image to enlarge)

While the price of gold constantly fluctuates, you would have experienced, on average, no inflation over the last 30 years if you'd used gold to purchase corn. Actually, right now, it'd be on the cheap side.

When you extrapolate this to other food items – and virtually everything else you buy – it's very liberating. Think about it: gold continues its safe-haven role as a reliable hedge against rising inflation.

I believe that those who save in gold will experience, on average, no cost increases in the things they buy and the services they use.

Their standard of living would not be impacted.

I think this kind of thinking is especially critical to adopt when you consider that supply and demand trends for gas and food dictate that prices will likely rise for a long time, and perhaps dramatically.

So how much will you need to make it through the upcoming inflation storm and come out unscathed?

Like all projections, assumptions abound. Here are mine for the following table. I'm assuming that:

  • The price of gold, on average and at a minimum, tracks the loss in purchasing power of whatever currency you use, and that it does so from current prices. Given gold's history, this is an easy assumption to make.
  • Gold sales, over time, capture the gain in gold and silver so that your purchasing power is preserved. (This doesn't mean I expect to sell at the top of the market; I expect we'll be selling gold as needed – if gold has not itself become a widely accepted currency again.)
  • We pay taxes on the gain. This will decrease our net gain, but there should still be gains. In the famous Weimar Germany hyperinflation, gold rose faster than the rate of hyperinflation.

To calculate how much we'll need, I looked at two components, the first being average monthly expenses. What would we use our gold and silver for? From corn to a house payment, it could be used for any good or service. After all, virtually nothing will escape rising inflation. Here are some of my items: groceries, gas, oil changes and other car maintenance, household items, eating out, pool service, pest service, groceries and gas again, eating out again, vitamins, movie tickets, doctor appointments, haircuts, pet grooming, kids who need some cash, gifts, and groceries and gas yet again. Groceries include ice cream, in my case. How many ounces of gold would cover these monthly expenses today?

And don't forget the big expenses – broken air conditioner, new vehicle, vacation… and I really don't think my daughter will want to get married at the county rec hall. How many ounces of gold would I need to cover such likely events in the future?

The point here is that you're probably going to need more ounces than you think. Look at your bank statement and assess how much you spend each month – and do it honestly.

The other part of the equation is how long we'll need to use gold and silver to cover those expenses. The potential duration of high inflation will dictate how much physical bullion we need stashed away. This is also probably longer than you think; in Weimar Germany, high inflation lasted two years – and then hyperinflation hit and lasted another two. Four years of high inflation. That's not kindling – that's a wildfire roaring through your back yard.

So here's how much gold you'll need, depending on your monthly expenses and how long high inflation lasts.

Every corn-based product on the grocery shelf will soon take a lot more dimes and dollars to buy. But wait – what if I used gold to buy corn?

Ounces of Gold Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in gold, oz* Inflation Duration
6 months  1 year  18 months 2 years 3 years 4 years 5 years 
*Based on $1,600 gold price


If my monthly expenses are about $3,000/month, I need 45 ounces to cover two years of high inflation, and 90 if it lasts four years. Those already well off or who want to live like Doug Casey should use the bottom rows of the table. How much will you need?

Of course many of us own silver, too. Here's how many ounces we'd need, if we saved in silver.

Ounces of Silver Needed to Meet Expenses During High Inflation
Monthly expenses in US dollars Monthly expenses in silver, oz* Inflation Duration
6 months  1 year  18 months 2 years 3 years 4 years 5 years 
*Based on $28 silver price


A $3,000 monthly budget needs 1,285 ounces to get through one year, or 3,857 ounces for three years.

I know these amounts probably sound like a lot. But here's the thing: if you don't save now in gold and silver, you're going to spend a whole lot more later.

What I've outlined here is exactly what gold and silver are for: to protect your purchasing power, your standard of living.

It's like having your own personal financial bomb shelter; the dollar will be blowing up all around you, but your finances are protected.

And the truth is, the amounts in the table are probably not enough. Unexpected expenses always come up. Or you may want a higher standard of living. And do you hope to leave some bullion to your heirs?

It's sobering to realize, but it deserves emphasis: if we're right about high inflation someday hitting our economy…


Most people don't own enough gold and silver.

If you think the amount of precious metals you've accumulated might be lacking, I strongly encourage you to put a plan in motion to save enough to meet your family's needs.

We have top recommended dealers in BIG GOLD, ones we've vetted that are trustworthy and have highly competitive prices. We also recommend a service that will deduct whatever amount you chose from your bank account and buy bullion for you automatically. And now, given how concerned we've been about the inflation that's coming, we've actually started our own service. You can check it all out in the current issue of BIG GOLD, risk-free. I can tell you that purchase premiums are incredibly low, due to a proprietary system that bids your order out to a network of dealers that compete for your business. We're already using it, and the response from other investors has been tremendous.

Whatever plan you adopt, my advice is to make sure you have a meaningful amount of bullion to withstand the firestorm that's almost mathematically certain to occur at this point. And now you know exactly how much gold you're going to need.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/05/2012 - 12:56 | 2764869 ParkAveFlasher
ParkAveFlasher's picture

fo-ty ounce nuggetz, bitchez!

Wed, 09/05/2012 - 13:01 | 2764879 Rahm
Rahm's picture

The excrement made physical contact with a hydro-electric powered oscillating air current distribution device.

Wed, 09/05/2012 - 13:02 | 2764889 ParkAveFlasher
ParkAveFlasher's picture

I'm thinking that when the excrement hits the rotor blades, it'll spray out as hollow point bullets.

Wed, 09/05/2012 - 13:17 | 2764911 hedgeless_horseman
hedgeless_horseman's picture



If you think the amount of precious metals you've accumulated might be lacking, I strongly encourage you to put a plan in motion to save enough to meet your family's needs.

Before you buy gold or silver, or make a plan, run through my absolutely free hyperinflation exercise: 

Try to go just one month without buying a single thing.  Then, take all the month's income you did not spend, and buy the things you missed the most during the last week.

Few cowboys win their first rodeo.

Wed, 09/05/2012 - 13:22 | 2764987 Dalago
Dalago's picture

The system is made to fail.

Wed, 09/05/2012 - 13:43 | 2765068 Landotfree
Landotfree's picture

I would basically agree.  The use of the equation ie interest puts a shelf life on the system due to the need for exponential growth.  

The eventually outcome is fail after about a generation and/or 60-80+- years.  The only way to escape is to have unlimited power.

Thu, 09/06/2012 - 00:13 | 2766962 TwoShortPlanks
TwoShortPlanks's picture

From Casey again: During the 5 years of the Weimar collapse the price of Gold in fact rose at an average rate of 180% of the rate inflation (Gold v Inflation Weimar Germany). So as Inflation doubled and doubled again, Gold roughly quadrupled and quadrupled again! People who held a meaningful amount of Gold actually became wealthier and wealthier!


Of course nothing is ever simple, so I’ll attempt to explain something clearly and wildly fundamental which I believe Casey Research has overlooked. There is yet another component which is by far THE biggest factor of them all; it’s not the Inflation figure, it’s not the amount of Gold you own and it’s not how fast you spend what you have (within reason of course).

There are effectively four parts to wealth preservation in this scenario, they are;

1.       How much Gold you own at the beginning

2.       The rate at which you spend Gold

3.       How long you can hold-out before being forced to spend the Gold you have

4.       The X Factor, which I will explain now

The biggest [X] factor affecting how much Gold you need to own is actually…*insert Drum Roll*…the ratio between the ‘Global Funds’ and ‘Gold Holdings’ as of 2012.


Consider this: Back in the days of Weimar Germany we still had close to 4.5 Billion ounces of Gold ever mined since the dawn of civilization, and the ratio between the amount of ‘Above Ground’ Gold in existence versus Global Industry, Global Assets and the Global Monetary System was a certain size…let’s call it 1:1 for argument sake. Today, in contrast, we have only 5 Billion ounces of ‘Above Ground’ Gold in existence however, the size of Global Industry/Assets/Money is vastly greater, also, the Global Monetary System now dwarfs Industry itself, in fact there’s $700 Trillion sitting out there, much of it accumulated since 1971.

 Let’s compare apples with apples, not apples with oranges!

 It’s safe to assume that-that ratio of 1:1 is now something like 1:10,000 (Gold versus Global Industry/Assets/Money). Even if only 20% of Global Wealth are liquid and able to chase the Gold price, that figure is around $140 Trillion, or, $28,000 chasing ever single ounce of Gold…assuming every ounce was on the market and for sale, which it most certainly isn’t!

 Don’t forget, you don’t just need cash to buy Gold, given that Gold can now be legally used as ‘Collateral’ and soon Tier1 Capital Asset, you can easily swap Real Estate Bonds, Equities, Stocks and Shares, Over the Counter Derivatives (OCDs)…almost anything!

 Question 1: Given that the amount of liquid assets able to chase Gold in circulation has increased by at least 2,000 fold (20% of 10,000), do you think this would affect the Weimar Gold to Inflation rate of 180%???

 Given that your response to the question is a simple ‘Derrrr, of course!’, then…

 Question 2: Now how much Gold do you think you’d need NOW given that there is 200,000% as much liquidity freely able to chase Gold and yet Gold has only increased by a mere 20%???

 Now, I know the article is aimed at the average investor, but ask yourself, how accurate is it, and how relevant is it if Hyperinflation hit today?

Wed, 09/05/2012 - 13:32 | 2765026 DCFusor
DCFusor's picture

Wow, that's sage as hell, and I know from experience just how true it is.  It really re-aligns ones priorities in a positive way.  Kind of tough if you have a girlfriend, but maybe if that spend rate is all she's there for, you're better off anyway.

I "dropped out" of the normal wage slave life in '79, used my meager retirement fund to buy raw land (some farmable) and built from there.  It was one hell of a lot more difficult than those who think a bugout bag is all they need can possibly imagine, but I pulled it off and it's all good now - and now I know a few things I didn't know about before re what's important in life and what things are truly worth.  At some point I got the farmstead into good enough shape to start and run a business that was very profitable, and this time - I didn't spend the money on useless junk destined for the trash can or crapper in short order, but real assets, tools, capabilities, and it's been a damn good plan.

Off grid solar, which also runs that car everyone loves to hate here (don't you dare drive one and find out how good it really is - you'll have some dissonance if you do).

Machine shop - I can make or fix nearly anything - even parts for my fusor experiments.

Farm - hey man, I got food.  Most have no idea how hard dirt farming is, and there IS a learning curve, it's not for paper pushers who only think they are smart.  Meet some sucessful farmers and see if they're not smarter than you are and about more things - just do it.

Land - if you don't like what I'm doing, get off my land, you're trespassing if you even know I'm here.  And it's defensible.

Point is, this didn't take two months - it took about 3 decades...maybe a smarter and stronger guy could have done it quicker, dunno, I'm pretty much both and it was still hard.

And I'm still not really self sufficient, but pretty good compared to most and between the neigbors we might be, dunno.  I do know I've used exactly 18.5 gal of gasoline in 2012 in that car and in backup generators.  How much do you need in a week?  Who are you paying that money to in the end, and are they your friends?  Or do we have to tack the cost of the military onto the true price of gasoline (and a lot of other things)?



Wed, 09/05/2012 - 14:05 | 2765200 Nobody For President
Nobody For President's picture

Right on DCF - especially how much work it takes. It ain't a project - it's a process. I've been at it 4 decades off the grid, and am pretty settled. Don't farm though, just fruit trees and a garden. Lots of deer about, could change my vegetarian ways if I had to... Good water supply, good tools,  and tools to maintain them, good shop, adequate energy - but I still really hope the stuff does not hit the fan to the point I gotta go it alone (with my neighbors - good folks). But I can if I have to. 

But it does take a shitload of work to be your own water department, sanitary district, building contractor, electrician, arborolist, plumber (I hate plumbing, but I do it), roofer, wildlife manager (just try keeping the fucking bears out of your bee colonies), and general handyman/maintenance person. Just about the time you get reasonably good at something, you're done with the job and on to another one with a new learning curve. And when the power goes out or the water stops - you are IT muther, and need to get on it right NOW - and no matter how many times I have risen to the task, it always is a gut check when I have to grab the plumbing back pack and head up the water line, or grab the multi-tester and head for the Outback solar system. 

Homesteaders off grid are some of the last generalists in the US of A.

I love it!

Wed, 09/05/2012 - 14:52 | 2765402 Imminent Collapse
Imminent Collapse's picture

A country boy can survive.

Wed, 09/05/2012 - 14:53 | 2765403 Imminent Collapse
Imminent Collapse's picture

A country boy can survive.

Wed, 09/05/2012 - 22:10 | 2766738 Sedaeng
Sedaeng's picture

very well stated sir!

I look forward to following your lead. I just hope I can learn quickly enough to survive the shit storm that is coming...







Wed, 09/05/2012 - 23:35 | 2766925 rambo1028
rambo1028's picture

I was just thinking about this very subject on the way home today. I want desperately to become more self sufficient but where to start seems so extremely overwhelming. I guess I came to the conclusion that it may be too late...

Wed, 09/05/2012 - 13:49 | 2765091 ziggy59
ziggy59's picture

Bitcoin exchange hacked...

BitCoin Exchange Loses $250,0000 After Unencrypted Keys Stolen

Anyone holding digits instead of hard assets is holding diddly

The crooks love people to trust their invisible investments

Wed, 09/05/2012 - 16:16 | 2765681 smiler03
smiler03's picture

+1 Great link. 


Now who didn't see that coming. The currency of hackers got hacked.

Wed, 09/05/2012 - 17:59 | 2765961 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

one website got hacked.  not the currency.  Just like corzine vaporized the gold, some dude vaporized some other dude's btc.  


I hold bullion in my possession.  But I also hold btc, and it has way more upswing.  Soon we're going to have ASICs and most probably a bitcoin mastercard.  Then the game is on.  


Sorry to diffuse your FUD

Wed, 09/05/2012 - 18:14 | 2766004 All Out Of Bubblegum
All Out Of Bubblegum's picture

LOL! So if someone breaks into your house and takes your cash, it's the money's fault?

I bought bitcoins at $4 last year and held most of it when it hit $30. I kept it when it went to $2. At almost $11, my bitcoins are outperforming the dollar, gold, the Sucker's Exchanges in NYC and just about any other hard asset you can name.

Good luck in the crash. You're gonna need it!

Fri, 09/07/2012 - 12:45 | 2772143 BooMushroom
BooMushroom's picture

A bitcoin MasterCard would be pretty dope, it would solve one of the major problems with the currency. I always wondered how people would spend their bitcoins for regular stuff like rent and food. A MasterCard would fix that right up.

Wed, 09/05/2012 - 18:41 | 2766102 NidStyles
NidStyles's picture

How doe we know it wasn't the creator of it that did it? That's the point, if a man is in charge, then a man can act immorally and screw everyone else. 

Wed, 09/05/2012 - 14:15 | 2765245 El Tuco
El Tuco's picture

How about this experiment to fight inflation. Cancel Cable, cut your land line, stop going out to eat, cook at home, cut your own grass, keep your car for 15 years +, wash it in your driveway, and stop looking at what other people have because it's the banks anyway, and there are many more creative ways to keep what is yours and stop feeding the beast.

Food and gas, that is all.

It's amazing how good it feels when you can tell everyone to go fuck off because there is nothing I want a very little that I need.


Wed, 09/05/2012 - 15:23 | 2765513 LawsofPhysics
LawsofPhysics's picture

Spot on!  Well, at least until the zombies show up for your flesh because nothing can be delivered in the urban areas.

Wed, 09/05/2012 - 15:40 | 2765558 steve from virginia
steve from virginia's picture


Get rid of the fucking car ...


What do you think is pushing up non-durable goods' prices?


The car is a useless toy that requires 3 months of labor to pay for. Less than three months would be required to walk places. Owning a car is to be a sucker for big business.


Why do you think there is the 'big government' that everyone hates? Car. Massive car infrastructure needs a gigantic government to manage it and provide endless financing (deficits) for it.


Do yrself a favor and sell the car to some other sucker ... while you can.

Wed, 09/05/2012 - 16:02 | 2765646 LawsofPhysics
LawsofPhysics's picture

Unfortunately, I still use my tractors a lot.

But, then again, once the cities start emptying, the sharecroppers I can hire for peanuts may be able to do things cheaper.  So your arguement may still hold water.  I like it.

Fri, 09/07/2012 - 12:56 | 2772171 BooMushroom
BooMushroom's picture

Room and board for a family of four is currently averaging well over a thousand USD per month. Food for same is ~$500.

$1500/month is more than minimum wage for one person. So if you provide room, board, and security, everyone will be happy when U-6 is 40%. In fact, there are probably some people in Greece and Spain right now who would take you up on it.

Wed, 09/05/2012 - 16:34 | 2765726 10mm
10mm's picture

Me and boys got a little something for the urban shit heads.

Wed, 09/05/2012 - 16:44 | 2765750 JuliaS
JuliaS's picture

I haven't bought a single thing last month. Though, next month I'm not going to buy the thing I missed the most, cause I still won't have any money.

Wed, 09/05/2012 - 13:16 | 2764953 punxsutawney phil
punxsutawney phil's picture

unreal obama clips....get a new speech writer


Wed, 09/05/2012 - 13:30 | 2765013 RockyRacoon
RockyRacoon's picture

What was the topic again?

Wed, 09/05/2012 - 18:48 | 2766121 Dr. Sandi
Dr. Sandi's picture

To summarize the topic, I believe Obama's speech writers have moved to the countryside with many weapons they'd love to use on city dwellers and have become self sufficient because of canny gold and silver purchases.

Wed, 09/05/2012 - 13:50 | 2765094 Everybodys All ...
Everybodys All American's picture

The Empty Suit is just reading the telepromptor but with inflection and feeling so please give him a break.

Wed, 09/05/2012 - 20:17 | 2766441 Diogenes
Diogenes's picture

Reminds me of an old Wizard of Id cartoon.

Lackey: Sire, the  election is coming up soon

King: Do you have that list of campaign promises I used last time?

Lackey: Here they are.

King: Did I keep any of them?

Lackey: No, sire.

King: Good, I can use them  again.

Wed, 09/05/2012 - 12:57 | 2764874 q99x2
q99x2's picture

Eat silver that hasn't gone up since the 80s.

Wed, 09/05/2012 - 18:46 | 2766114 Dr. Sandi
Dr. Sandi's picture

My lederhosen have no grasshoppers

Fri, 09/07/2012 - 12:58 | 2772184 BooMushroom
BooMushroom's picture

Remind me again what the USD and the stock market have done since then.

Wed, 09/05/2012 - 12:57 | 2764875 francis_sawyer
francis_sawyer's picture

Yo man ~! why u don't gimme, like, one McNugget... I got fitty five cent CASH MONEY!

Wed, 09/05/2012 - 13:00 | 2764886 ParkAveFlasher
ParkAveFlasher's picture

immah pay you wi' mah gol' TEEF.  yup yup, immah gladly pay you tuesday.

Wed, 09/05/2012 - 13:12 | 2764931 vato poco
vato poco's picture

"Teefusses", Dawg. "I'ma pay you wit mah gol' TEEFUSSES on Tuesday." In times of societal upheaval and economic strife such as these, it is incumbent upon us all to set an example and speak properly. Otherwise, afer all, we'd be no better than animals.

Wed, 09/05/2012 - 14:02 | 2765180 Mr Pink
Mr Pink's picture

Best way to make sure people wont complain about rising food prices?  Give the entire nation food stamps! I don't see any welfare queens checking prices, clipping coupons or buying rice or potatoes. They are loading up on soda, chips and cookies!

Fri, 09/07/2012 - 13:04 | 2772201 BooMushroom
BooMushroom's picture

It would be interesting to stop someone with a cart of Frito-Lay, Coke, and Keebler, and show them what they could have bought instead, if they bought fruits and veggies, tea and coffee (or even koolaid!), and meat and grains.

But they would tell you two things:
1. I can't spend the money I saved on other stuff.
2. Now I have to COOK! That seems like work.

Wed, 09/05/2012 - 12:58 | 2764878 Fuh Querada
Wed, 09/05/2012 - 13:08 | 2764897 Landotfree
Landotfree's picture

Inflation topped out in dollar terms in 2007 based on one quarter of that year the credit system was expanding by an annual rate of around $4.7T.   By 2008-2009, credit expansion went basically negative.  Now the dead cat bounce you are see about $1.2T annual credit expansion, however this is trying to fuel the $53T US credit market system and the $200T worldwide credit system.   Inflation topped out in percentage terms in the 80s which was easily expanding at double digits.  Eventually the dead cat bounce will be over and you will be back into collapse time.   

Inflation has been dead for 5 years and will for the most part be dead for the remainer of my life.   

The system has hit it's peak which was fuel for 6+ decades, it will be followed by the biggest collapse the world has ever seen.  You are still in the first inning of this, this will play out over many decades.  What you are witness is actually kind of a cool event if you ask me, of course the chaos will be quite scary.    Sorry you will not be able to feed 7 billion without a functioning global credit system.  Once it goes, all the unfunded liabilities walking around are going to go the way of the dinosaur. 

Wed, 09/05/2012 - 13:10 | 2764922 otto skorzeny
otto skorzeny's picture

good post- watch out for the blowback from ZHers

Wed, 09/05/2012 - 13:15 | 2764932 Landotfree
Landotfree's picture

Very true.  :)

I love people who believe the Benny Helicopter lie, there are no helicopters and even if they were helicopters they are not going to save the unfunded liabilities from being thrown into the fire pit.  All I see are billions of unfunded liabilities walking around pretending the Benny's helicopter is coming.   

The just recycle the same lie they have been telling for 1000s of years, use the words helicopter and the lemmings believe them yet again.   It's kind of fun to watch in a way.   Humans are so predictable.  

Wed, 09/05/2012 - 13:30 | 2765000 LawsofPhysics
LawsofPhysics's picture

Right, how's that zero interest rate policy (ZIRP) working out again?    Following your logic, once NIRP (negative interest rate policy) becomes public policy the bank will pay me to take out another business loan. - FAIL

Well you are correct, humans are predictable, and stupid.

 didn't junk you, unfunded liabilities indeed.

Wed, 09/05/2012 - 13:34 | 2765023 Landotfree
Landotfree's picture

Humans continue to make the same choices expecting a different outcome, the outcome will be the same everytime.   Humans usually win the battles against the equation, but the equation always wins the war.   What you are going to witness  has already happened.   The most the humans can do is bring on further delay like Neo did, the outcome has always been known.  

Different choices can produce different results but I can't say they were be better results, at the end of the day systems appear to always collapse.

"The Architect - Denial is the most predictable of all human responses. But, rest assured, this will be the sixth time we have destroyed it, and we have become exceedingly efficient at it. " - The Matrix

Wed, 09/05/2012 - 13:48 | 2765059 ZerOhead
ZerOhead's picture

Let's see if I've got this right...

Credit collapse > Banking system collapse > Global Economic collapse > TEOTWAWKI where cockroaches reign supreme above all EXCEPT the increasing purchasing power of the US dollar?

I think I need to educate myself better by watching The Matrix more often...

Wed, 09/05/2012 - 13:45 | 2765073 LawsofPhysics
LawsofPhysics's picture

Stop it, you sound like a desperate graduate student.  In the real world, there are still plenty of real things and innovation that needs to be delivered.  Stop with the mental masterbation, now you just sound silly.

Thu, 09/06/2012 - 09:24 | 2765852 Marla And Me
Marla And Me's picture

Mako just likes to riddle people into understanding the exponential function.  Once you get it (and from what I've read from you, you understand it perfectly well), it really changes one's outlook.  Like B9K9 so artfully used to say, it is useless to complain about the chain of events that is taking place as the math requires it.  Simply hedge accordingly, and prepare for the bottleneck.  You are readier than most.

Wed, 09/05/2012 - 14:24 | 2765285 silverserfer
silverserfer's picture

somebody has been subscribing to the graham summers deflatioanry colapse newsletter. Dinosaurs who thing that the dollar is gong to get strong again and gold back to $250 ok buddy!

Wed, 09/05/2012 - 17:13 | 2765831 Marla And Me
Marla And Me's picture

Good to see you again Mako.  I like the new moniker.  Your writing style gives you away.  Bartlett said it best: "[t]he greatest shortcoming of the human race is our inability to understand the exponential function."

Wed, 09/05/2012 - 13:53 | 2765110 otto skorzeny
otto skorzeny's picture

physical cash is king- keep it hidden and on the DL

Wed, 09/05/2012 - 14:25 | 2765295 silverserfer
silverserfer's picture

yes, please do. lemming.

Wed, 09/05/2012 - 15:10 | 2765472 AlphaDawg
AlphaDawg's picture

we are either getting defaults and deflation or bailouts and inflation

my money is on inflation

Wed, 09/05/2012 - 15:38 | 2765548 fuu
fuu's picture

Hi serial junker!

Wed, 09/05/2012 - 15:21 | 2765503 Panafrican Funk...
Panafrican Funktron Robot's picture

Holding cash and gold = hedging better.  Not that there ultimately is a hedge, but still.

Wed, 09/05/2012 - 13:40 | 2765034 ZerOhead
ZerOhead's picture


Wed, 09/05/2012 - 13:11 | 2764929 Red Heeler
Red Heeler's picture


Wed, 09/05/2012 - 13:45 | 2765010 LawsofPhysics
LawsofPhysics's picture

Does "velocity" matter if no one wants your paper?

Wed, 09/05/2012 - 13:47 | 2765087 Red Heeler
Red Heeler's picture

"Does "velocity" matter if no one wants you paper?"

Do you want yours? If not, I'll take it.

Wed, 09/05/2012 - 15:21 | 2765506 LawsofPhysics
LawsofPhysics's picture

What do you have to offer in exchange?  That is all that will matter.

Wed, 09/05/2012 - 13:57 | 2765137 The Alarmist
The Alarmist's picture

"Inflation has been dead for 5 years and will for the most part be dead for the remainer of my life."


What planet are you living on?  Not only have food container sizes been shrinking, as noted by the author, but prices have also risen on the same smaller packages.  

But hey, if that's not inflation to you or Ben and his goys, then I guess it's not inflation for the rest of us too.

Wed, 09/05/2012 - 14:28 | 2765310 carambar
carambar's picture

you are right. the excess liquidity in the system is no a risk as long as we do not have strong credit demand.

Currently there is no engine of growth around the world. Money is sitting on the side line, sterilized by the banks.

Market is up only because private investors and asset managers are looking for value and yield. Banks are not involved.

The risk is more of deflation that inflation. Gold could crash at any moment.

In the mean time, gold goes up because the Tylers' of the world fuel the scare of inflation. Be ready to bail out.



Fri, 09/07/2012 - 13:18 | 2772269 BooMushroom
BooMushroom's picture

I just don't see the government firing up the incinerator and throwing in trillions of dollars worth of fiat and/or ones and zeros(whose money would they destroy?) If the money supply stays the same, there can't be deflation. If there is the same amount of dollars (and zeroes and ones) chasing after a shrinking amount of goods, then we will get price inflation.

Wed, 09/05/2012 - 15:03 | 2765445 HeliBen
HeliBen's picture

I'll take some of what Mish..., ahem, Landotfree is smoking.

Stupid me buying real things, I should be stockpiling "valuable" paper with pretty ink on it.

No data to point to a massive deflation ever happening for any length of time in any sort of pure fiat system, but this time is different.

I thought these Mish born Deflanistas gave up when everything they buy regained highs after the collapse a few years earlier that was supposed to be the end all of deflationary events?

Guess not, the big one is coming... ;)


Wed, 09/05/2012 - 16:33 | 2765723 somecallmetimmah
somecallmetimmah's picture

"Sorry you will not be able to feed 7 billion without a functioning global credit system."

I have no intention of feeding 7 "anything", billion or otherwise.  Postponing the global, inevitable die-off, will only make the eventual die-off all the worse.

So do us all a favor and go throw yourselves off a cliff, already.

Wed, 09/05/2012 - 13:08 | 2764912 Red Heeler
Red Heeler's picture

"But...Mish says there is no inflation!"

If he really believes that he should not be allowed to spend more on groceries now than he did in 1971.

Wed, 09/05/2012 - 13:16 | 2764955 Landotfree
Landotfree's picture

You will understand, when one day you go to the groceries and it ain't open.  

Wed, 09/05/2012 - 13:24 | 2764989 Red Heeler
Red Heeler's picture

"You will understand, when one day you go to the groceries and it ain't open."

The vast majority of my groceries are in my root cellar, barn, pasture, pens, fields, and gardens.

EDIT: Wal Mart closed? I sincerely doubt it. Food quality is another matter entirely.

Wed, 09/05/2012 - 13:26 | 2765001 Landotfree
Landotfree's picture

Same thing still applies.   They will be closing shop just like the 30s or more like 30s on steroids.  Inflation is dead and will be for decades.  Whether or not your local grocery store increase the price of ding-dong by $0.10 is immaterial.  

Wed, 09/05/2012 - 13:33 | 2765027 Red Heeler
Red Heeler's picture

So, you're asserting that food will become cheaper as it becomes more scarce and the purchasing power of the dollar collapses?

I beg to differ.

Wed, 09/05/2012 - 13:52 | 2765100 Landotfree
Landotfree's picture

Of course that is what they said in the 30s while at the same time they were dumping grain out at sea in an attempt to get prices to go up, while at the same time people were going hunger.  Yes, they were doing that in Europe, matter of fact this stupid stunt has been suggested here by burning down houses.  Won't work, it's a tapped out system, it's must hit it's max bottom. 

Of course the grocery store can't sell it to you cheaper as they have legacy costs, they just close.   Why did all those business close during the depression, let me guess it was because people were willing to pay up for items.   This will be much worse than the last one, all this stuff will just shutdown.   One day you will go to the ATM and it just won't work no matter how many times you put your card in there.

Wed, 09/05/2012 - 14:27 | 2765302 Matt
Matt's picture

Take a read through the NDAA. The government can redirect fuel to make sure the food gets to Wal-Mart. They already have the EBTs, just need everyone on the card. The long lines will be at the bus stop to get to and from Wal-Mart, I suspect.

Wed, 09/05/2012 - 15:09 | 2765460 DosZap
DosZap's picture

 The government can redirect fuel to make sure the food gets to Wal-Mart. They already have the EBTs, just need everyone on the card. The long lines will be at the bus stop to get to and from Wal-Mart, I suspect.

SCREW WALMURT..................they are trying to institute a way to purchase and check out,pay, using your cell phones.

As it costs them 12 million per second for the Checkers.................that means the most flea bitten POS imporing foreign goods  chain on the planet is trying to figure out a way to fire even MORE Americans.

 IF Sam were alive he would lynch is own damn family.

Wed, 09/05/2012 - 15:37 | 2765520 LawsofPhysics
LawsofPhysics's picture

You'll have to forgive me, but my faith the government is somewhat less sound.  Although, now that the banks and financial houses, are the fucking government, who knows.


Wed, 09/05/2012 - 14:35 | 2765324 silverserfer
silverserfer's picture

yes, the coplapse will result in spiraling price declines where breads price will go from $4 a loaf down to 10 cents and then when the TSHTF the store will pay you to take the bread and then they will go out of business.

then Mad max will roll up and offer you  a can of alpo for a couple of smokes. but you wont have any because graham Summers told you to keep your money and not buy commodities to survive the coming financial armageddon.

Wed, 09/05/2012 - 13:31 | 2765019 Fuh Querada
Fuh Querada's picture groceries..
Yeah, I once put in a link to in a comment on an earlier "hyperinflation is ludicrous" Mish post, and the f***er deleted the comment. Also, any references to FOFOA get deleted and he (FOFOA) makes a really convincing case for balls-to-the-wall USD hyperinflation for example his article on "peak exorbitant privilege".

Wed, 09/05/2012 - 21:58 | 2766707 DaveyJones
DaveyJones's picture

FOFOA is great

Fri, 09/07/2012 - 13:23 | 2772295 BooMushroom
BooMushroom's picture

Bullish for earplugs and sound recordings of "LALALALALALALALA I CAAAAAN'T HEAR YOU!"

Wed, 09/05/2012 - 12:59 | 2764880 tiger7905
tiger7905's picture

Great Bill Murphy interview by Daniela at Kitco, on JPM silver problems, see's things developing in Sept.

Wed, 09/05/2012 - 13:27 | 2764925 slewie the pi-rat
slewie the pi-rat's picture

i junked you for "fortune-telling by link";  not b/c i dislike you or billM, ok?

if you have a handle on the future yourself, why not wite a few paras about it?  we have enuf "authorities" here already imo

you have made less than 1 page of posts this year and 5 since 6.1.12;  get off the "what must be" bandwagon and the JPM follies

we all know how billM and what he stands for

however, some have noted that GATA is pretty quiet about gold and silver US coinage becoming legal tender again in the US as the CONSTITUTION REQUIRES

... as is zH editorially, btw...

doesn't 'make sense' to remove the disadvantages to PMs apparently?  no, but these guys have secrets too, and if they step outa line, they will be destroyed on a personal and family level

so altho they "talk the talk" they are fearful of not having their "opinion" approved by mauldin and his crowd of clones

here we have a report by a casey clone 'talking book' in 9.12

maybe he's afraid his net worth will drop if you don't buy more gold at this level?  because of "inflation"?  or is it too complex to be a little "critical" now and then?

i told my few peeps to start buying in the 700's; i told them to go all in when the price hit 1000 and then dropped back into the 800's a few years ago...

they are all-in; but most of them didn't "believe slewie" until everybody "got it" so they are now shitting their pants every time something "happens" to the down-side due to criminals and their "prices"

nobody i know is buying anything except silver right now unless they are "speculating" or like the casey crowd:  prospecting w/ OPM and "opinion"

Wed, 09/05/2012 - 13:41 | 2765058 RockyRacoon
RockyRacoon's picture

Slewie, original thought is hard to come by these days.   I was just dwelling on the pretty gold/silver charts/tables in the article and it occurred to me that one will not need to make a full transition to PMs to continue to live in the manner in which one is accustomed.   There will be a transition period where dependence on PMs develops but not instantaneously.  So, only a portion of one's living expenses will have to be covered by PMs, and a gradual reliance on the stash is required.  I guess we'd just have to figger that part out for ourselves, eh?  That presumes, of course, that there hasn't been a plethora of boating accidents in the interim.

Wed, 09/05/2012 - 14:06 | 2765188 slewie the pi-rat
slewie the pi-rat's picture

hey R_R!

we all know how billM and what he stands for

however, some have noted that GATA is pretty quiet about gold and silver US coinage becoming legal tender again in the US as the CONSTITUTION REQUIRES

... as is zH editorially, btw...

doesn't 'make sense' to remove the disadvantages to PMs apparently?  no, but these guys have secrets too, and if they step outa line, they will be destroyed on a personal and family level

so altho they "talk the talk" they are fearful of not having their "opinion" approved by mauldin and his crowd of clones

gold & silver coinage is required by the US Consitution to be LEGAL TENDER

and that would hurt?  to take away the tax-disadvantage which cowardly whipsocks who don't give a fuk about the USA like the casey crowd speak of here and ACCEPT from their internationalist pay-masters?

i do not accept it!  slewie does not ACCEPT that the US Consitituion is not being followed with US Mint-produced gold and silver coinage

it is a CRIME!

i think we should go there (to US PM coinage = legal tender) and i've been saying so HERE since day 1 as i'm sure you know, no matter what you wanna pretend, today...

so my Q to you is do YOU think that would be a good idea:  to remove the "tax consequeces of this" coinage NOT being legal tender?

yes or no? should gold and silver US Mint-produced coinage be legal tender (b/c the CONSTITUTION sez so) or NOT?

or are YOU just as much of a fuking PUSSY as tyler, GATA, the pols, and all the "inertest groups" too and are you gonna keep "begging the REAL question" i have been posing to these ignorant bullshit-artists for 18 months straight now?

yes or no rocky? where do YOU stand here?

and yes, i HAVE framed the question, but at least i have done so consistently day after day while everyone pretends it can't be an ISSUE for the U.S.A. b/c the CFR doesn't approve?  or GATA or some other internationalist interest group or "lobby" for the NWO

how about america?  thePeople's currency and MONEY?

yes or no?

Wed, 09/05/2012 - 14:31 | 2765309 centerline
centerline's picture

1.  Tax consequences should be removed.

2.  I don't think PMs as money is any certain panacea.  Is better than the private central bank bullshit, no argument there.  For the sake of better or worse, it is a reasonable next step.  The more I read and learn, the FOFOA approach does have my interest (freegold).

 3.  This article is bullshit because it assumes one is trying to maintain a certain standard of living in an enivronment where everyone is getting crushed.  Hot inflation to this level would result in rioting in the streets, martial law, rationing among other controls, etc.... which very well might be our outcome.

Wed, 09/05/2012 - 15:50 | 2765592 DoChenRollingBearing
DoChenRollingBearing's picture

+ all 3 centerline


-- A higher tax on gold sales?  .gov stupity and manipulation!

-- IMO FOFOA is the best gold analyst ouit there.

-- Predicting the future is very hard, especially if violence is involved...


Wed, 09/05/2012 - 14:48 | 2765377 silverserfer
silverserfer's picture

slweie, the problem with PM becming legal tender again is it would have to be global. Not just in the US, if there is still any price supression then there would be massive outflow of the"Good' money exchanged for "bad money" (any existing fiat currencies) or the face value for a merc dime would have to be at lease $10 before people would exchange is rather than hoard it.

Wed, 09/05/2012 - 15:20 | 2765498 DosZap
DosZap's picture

Real problem with G & S becoming LT again, is the cost per ounce, against fiat printed and in circulation.

Outside the SO called main(which was a small part of it) reason Nixon slammed the door shut was, by removing the G std, they could print as much fiat as they desired ,because they were not limited to printing only the amount of dollars by the quanity of G & S, left in the treasury.

 It would mean an automatic seizure, confiscation of all of it. The dollar is now worth approx 1/1692th of an ounce of gold.

How you gonna coin that?.Where is the value in that?.

We are FORKED.

Wed, 09/05/2012 - 16:14 | 2765672 RockyRacoon
RockyRacoon's picture

"yes or no? should gold and silver US Mint-produced coinage be legal tender (b/c the CONSTITUTION sez so) or NOT?"

The coins being produced are legal tender -- if you want to give away a $50 gold "coin" that weighs in at 1 Troy ounce.  Or a 1 ounce silver $1 Eagles at face value.  Not a really smart thing to do, but your question is answered in the strict sense as a "yes" most certainly.  Even when we had a semblance of a gold standard there were face values on the coinage.  There were $20 gold pieces and silver dollars.   What irks me is that there is a sales tax on purchases/sales of the coin of the realm.   Funny how I can go to the local bank branch and change a $20 bill for 2 $10s and there is no transaction tax.   That shit just ain't right.   I may not have answered your question the way you wanted, but I'll admit to not understanding the question fully.  Be gentle as I only have a limited number of hours to spend following your train of thought(s).  No easy task my convoluted buddy.

Wed, 09/05/2012 - 15:56 | 2765624 DosZap
DosZap's picture


I agree with most of what you say, as in this.

however, some have noted that GATA is pretty quiet about gold and silver US coinage becoming legal tender again in the US as the CONSTITUTION REQUIRES

Problem is Congress had the power to regulate it's value,and weights, and measures, and they passed the buck.

Legally, to the fockers.

Wed, 09/05/2012 - 13:02 | 2764888 LawsofPhysics
LawsofPhysics's picture

Forget the whole "flation" bullshit.  Think of it as a lot of people who need to buy things (like food, fuel, etc.) with no way to make the purchase, period.  The latter could be due to a loss of purchasing power or no one willing to sell, or way to deliver or...

Did we rally expect anything less?  The capital and resource mis-allocation and mal-investment will continue (and so will the beatings of responsible savers until moral improves).  The kleptocrat families and their children want their fucking rent, bitchez...

Wed, 09/05/2012 - 13:04 | 2764898 pazmaker
pazmaker's picture

Another salesman acting like a writer....


Wed, 09/05/2012 - 13:11 | 2764908 otto skorzeny
otto skorzeny's picture

buy these shiny trinkets from me  so I can convert the profits into worthless fiat and actually-you know- buy some real shit from the store with it. goldbugs are dumber than the injuns that took beads for massive tracts of land.

Wed, 09/05/2012 - 14:56 | 2765419 ParkAveFlasher
ParkAveFlasher's picture

Wampum was a fiat currency.

Wed, 09/05/2012 - 14:32 | 2765330 machineh
machineh's picture

Another salesman acting like a writer....

Dollars may be a crappy, inflation-prone currency. But when one's near-term expenses are denominated in dollars, it only increases risk to hold a volatile asset such as gold which fluctuates against the dollar.

If you followed Jeff Clark's shitty advice on this date last year, and bought 22.5 ounces of gold to meet monthly expenses through today ... congratulations, you got suckered like a bitch by a gold permabull.

Wed, 09/05/2012 - 14:56 | 2765417 silverserfer
silverserfer's picture

you can lead a horse to water but you cant make him drink.

so just stand there with your cash jackass.

Wed, 09/05/2012 - 13:07 | 2764909 Long-John-Silver
Long-John-Silver's picture

I was without a job for 9 months during Jimmy Carters term in office. That was the length of time I had to wait in line to get in the Navy. I bartered my labour repairing stuff for people. I was surprised by the stuff that people wanted repaired other than buying a new widget to replace it. I actually had too much work after a couple of months and had to start turning away some of it. I see the same thing happening today.

Wed, 09/05/2012 - 14:00 | 2765168 The Alarmist
The Alarmist's picture

Wow, I practically had the same experience in '79, but was standing in the line for the Air Force.  You think they are keeping us down to boost enlistments for the never-ending GWOT?

Wed, 09/05/2012 - 13:08 | 2764915 DarkAgeAhead
DarkAgeAhead's picture

What if I just grow my own corn?

Wed, 09/05/2012 - 13:11 | 2764928 pazmaker
pazmaker's picture

I was going to say..Jeff when TSHTF come see me .... I have eggs chicken, rabbits and other food items I'll trade you some for that gold...but it's gonna cost you!

Wed, 09/05/2012 - 13:13 | 2764935 otto skorzeny
otto skorzeny's picture

if the SHTF .556, 7.62, .308, .40, etc. will be worth much more than gold

Wed, 09/05/2012 - 13:15 | 2764951 pazmaker
pazmaker's picture

i have some of that too :)

Wed, 09/05/2012 - 13:16 | 2764954 DarkAgeAhead
DarkAgeAhead's picture

Definitely, as will the value of a tight community that preserves decent values and the rule of law.

Wed, 09/05/2012 - 18:23 | 2766030 Overfed
Overfed's picture

Tell ya' what, if TSHTF, you won't be able to talk me out of ammo for anything. I sure as shit wouldn't advertise that I had any. In fact, I lost all of mine in a boating accident.

Wed, 09/05/2012 - 13:25 | 2764973 KK Tipton
KK Tipton's picture

"What if I just grow my own corn?"

Get going. Buy and learn to stockpile seeds now. $4.10 to $6.20 an OZ currently.

High Mowing Organic Seeds - Roy's Calais Flint Corn -

High Mowing Organic Seeds - Painted Mountain Flint Corn -

High Mowing Fisher's Earliest Corn -

Those are open pollinated. Not hybrids.
Had very good luck with everything from those guys. Always look for non-scam seed sources.
Good info on the bottom of their pages.

You need 9 lbs seed per acre for corn.

Wed, 09/05/2012 - 13:34 | 2765037 Red Heeler
Red Heeler's picture

Thanks for the links.

Wapsi Valley is my best dent producer to date.

Wed, 09/05/2012 - 14:46 | 2765374 DarkAgeAhead
DarkAgeAhead's picture

Very true.  Moving to that pattern of self-sufficiency and resilience is a big lifestyle shift that takes time and skill.  But so does hyperinflation, so it's just a matter of choosing which path to go.

Or learn a trade and barter.

Wed, 09/05/2012 - 14:02 | 2765178 The Alarmist
The Alarmist's picture

"What if I just grow my own corn?"


If you don't use licensed seed-stock, then you will be engaging in unauthorized commerce and will be promptly be put out of business by a court-order-wielding Monsanto.

Wed, 09/05/2012 - 18:24 | 2766035 Overfed
Overfed's picture

Fuck Monsanto. Buy heirloom seeds.

Wed, 09/05/2012 - 13:15 | 2764947 Michelle
Michelle's picture

The central banks aren't printing, just threatening to print to keep assets from selling off. They CAN'T print unless they want Zimbabwe and that's not a good solution either. The Fed deferred to Congress and it was obvious during BB's testimony to the Senate Banking Committee 6 weeks ago. The ECB's hands are tied and it's up to the politicos to create the legal arms to administer bailouts. China is also preoccupied with their own regime change and don't seem willing to stimulate either. So what do we have? A standoff, nobody wants to move forward and the hope (illusion) that jawboning will continue to be effective just long enough for the wealthy to sell into strength and lock in lower capital gains taxes. Don't be a bag holder!


Wed, 09/05/2012 - 13:22 | 2764983 LawsofPhysics
LawsofPhysics's picture

Bullshit, ZIRP and NIRP, is fucking printing, you just don't "see" it becuase it is stuck in an unproductive liquidity trap as debt must still be serviced while the real economy fucking tanks (circle jerk between financial houses and central banks).  Don't be a douche bag, the owners want their fucking rent and do not care if you even have any wages, now pay up!!!

Wed, 09/05/2012 - 13:36 | 2765045 Michelle
Michelle's picture

You must be selling then.....oh, and using the F word really isn't necessary, reminds me of my 17 year old nephew.

Wed, 09/05/2012 - 13:47 | 2765081 LawsofPhysics
LawsofPhysics's picture

well, sometimes it it the only way to get a child's attention,  oh wait, maybe that isn't what you meant.

Wed, 09/05/2012 - 13:58 | 2765141 Michelle
Michelle's picture

Either way, you're still a douche bag.

Wed, 09/05/2012 - 15:33 | 2765536 CCanuck
CCanuck's picture

A perfect example of the rotting decay in our society....

Michelle, you have lowered yourself to calling names?

This is Fight Club Bitchez! lol.

Wed, 09/05/2012 - 13:58 | 2765151 Floordawg
Floordawg's picture

Maybe you'd be more fucking comfortable on Yahoo! Finance.

Wed, 09/05/2012 - 14:20 | 2765268 Michelle
Michelle's picture

A perfect example of the rotting decay in our society....

Wed, 09/05/2012 - 14:59 | 2765426 silverserfer
silverserfer's picture

bitches be trippin!

Wed, 09/05/2012 - 15:02 | 2765437 Floordawg
Floordawg's picture

Your right. Let all Zerohedgers adhere to Michelle's upstanding moral guidelines, because that's all she knows and it's most definitely the only "right" way. Anything outside her comfort zone will be religiousy forbidden and assuredly promote further societal decay.

Either your with her or against her.

Wed, 09/05/2012 - 19:57 | 2766378 silverserfer
silverserfer's picture

its not her fault. most people do not understand what money is. Power. thant is why so many tripout on worthless papaer. Well that paper is a manifest of the power of those who issue it. many would be suprised how money is used by the CIA to track peoples doing and allow it. In the world of nations acting covertly against each other, money is a basic tool used to achieve an objective. strategery. these areas are outside the world of finance and hard to understand from the standpoint of an investor.  

Wed, 09/05/2012 - 13:19 | 2764969 ironmace
ironmace's picture

buy lead.

Wed, 09/05/2012 - 13:22 | 2764980 Meesohaawnee
Meesohaawnee's picture

what do you mean "gets" out of hand. What about 97 crude on no fundamentals, just printing isnt "is" out fo hand??

Wed, 09/05/2012 - 13:22 | 2764985 buzzsaw99
buzzsaw99's picture

I stop buying ice cream, duh. That kills the economy even faster. There are tons of shit I can do without and be better off for it. Homie don't play that.

Wed, 09/05/2012 - 13:27 | 2765005 fuu
fuu's picture

From your article on Friday:

"First, once gold breaches its old high, you'll probably never be able to buy it at current prices again in this cycle."

"Regardless of the date, we're confident that a new high in the gold price will come."

"The window of time to buy gold at current prices is closing."


Wed, 09/05/2012 - 14:18 | 2765254 slewie the pi-rat
slewie the pi-rat's picture

how about you, fuu?

do you recognize what the "original" crime is with PM coinage?

and how simple it would be to fix it by making US Mint-produced PM coinage legal tender and not at a "tax disadvantage to fiat"?

US mint-produce gold and silver coinage shpould be legal tender in the USA b/c the contitution says so and 'it' MATTERS!

yes or no?

Wed, 09/05/2012 - 14:45 | 2765371 fuu
fuu's picture

I am not really sure what the crime was beyond it subverted the constitution, I could use some enlightenment here.

Utah now allows people to pay taxes in PM's based on a weekly spot value. Cap gains are waived for payments made in this manner. I imagine that is very handy to anyone owning a 1964 silver dime, you capture the purchasing power lost to inflation by paying taxes with it.

I support a return to US Mint produced PM coins being legal tender without cap gains taxes.




Wed, 09/05/2012 - 15:02 | 2765441 silverserfer
silverserfer's picture

paying taxes with PM's or in commerce at this point in time is foolish. You  should be using dollars untill you dont have any. PM's are core wealth and should be the last thing to go.  

Wed, 09/05/2012 - 14:51 | 2765398 Matt
Matt's picture

I, for one, will be more than happy to accept your 1 ounce gold coin at the face value of $50. I promise to apply taxes the same as if you were making a purchase with paper money.

Wed, 09/05/2012 - 13:35 | 2765043 Roland99
Roland99's picture

and if gold crashes for whatever reason?


Wed, 09/05/2012 - 14:24 | 2765283 ParkAveFlasher
ParkAveFlasher's picture

If you are worried about crashes, I recommend a helmet with a chinstrap. 


Wed, 09/05/2012 - 19:00 | 2766158 Dr. Sandi
Dr. Sandi's picture

I'm betting the odds of the dollar crashing are a whole lot higher than the odds of gold crashing.

Wed, 09/05/2012 - 13:39 | 2765054 boiltherich
boiltherich's picture

Man, I swear if I see one more news story or editorial piece or studious expose on IF we have price inflation I am just going to fucking LOSE IT!

I do not know about where you are but here inflation is as bad and in the case of food WORSE than it was in the 1970's when we were all scared out of our wits about how we would get through the month. Food here is up well over 40% in the last year, ditto fuel. Maybe some of you have not noticed how much smaller items are getting in the store, just yesterday I bought a Marie Callender's chicken pie for lunch and it was half the size it was last year. The box is only slightly smaller, and the top of the pie looks almost as big, but there is half as much pie under that top crust as there used to be. I found out the hard way when I set the microwave to 7 minutes as usual for one of these pies and it got crisped into ash.

A 50% reduction in quantity is a 100% increase in price. Even toilet paper, the rolls they come on now are half again as big as they were so that they can put less paper on the cardboard tube yet still have it look like it is the same size. Last month I was so broke I actually went to pick up a box of Kraft mac n cheese but I did not when I saw it has gone up by 90%. I used to like to have stargazer lilies once a month or so because they make the house smell good without spraying the place with chemicals, those are up 300% and because food is up so much I cannot afford the little luxuries I used to indulge in. Yesterday I went to Wendy's for a #7 spicy chicken sandwich, fries and a coke which I have not done in a couple of months but I was starving and wanted one so badly, I caved. Wow, they have gone up to $8.18, more glad than ever I live in Oregon because in California that would be $8.88 with sales tax. When a fast food sandwich fries and soda exceed the hourly rate for federal minimum wage you have a serious inflation problem. Twenty five million workers would have to work more than an hour just to get a quickie lunch at the slop chute. By the way, June 1 McD's went up 15% on their menus here. The power company has ask for and gotten a 4% raise for last January 1 and now wants another 9.5%. Motel 6 is now $59.99. That is a 1,000% increase since 1980.

When the Fed or the government say there flat out is no inflation when I know I have lost about 30-40% of my purchasing power in the last few years it makes me really angry, what they are saying is because prices are stable it is YOUR fault if you are struggling or failing, YOU are either too dumb or too immature about your spending and we know there is no inflation so we don't want to hear any bitching from you! What is perhaps the worst thing is that this is just the start of the rot, they are going to inflate till median home is a bargain and Mittens R can personally pay off the national debt.

Wed, 09/05/2012 - 13:51 | 2765103 Peter Pan
Peter Pan's picture

Buddy, you should be on national TV. If everyone was awake as you, Ron Paul might and the USA might have had a chance.

Sorry I can't give you more than one vote.

Wed, 09/05/2012 - 16:40 | 2765740 smiler03
smiler03's picture

@ Boiltherich.


I gave you +2000 but only one semed to count. I almost wet myself about the chicken pie microwave ash. It's disgusting to me that TPTB come out with garbage inflation figures, on both sides of the Atlantic I might add.

Wed, 09/05/2012 - 14:17 | 2765251 madcows
madcows's picture

YoY I have food inflation at 13.5%.  Overall inflation now at 11%.

Is a lie a lie if everyone knows its a manipulation of the truth?

Wed, 09/05/2012 - 14:50 | 2765389 stocktivity
stocktivity's picture

You got it...I've been noticing the packaging getting smaller but prices stayiong the same. Sneaky way to inflate prices.

Wed, 09/05/2012 - 16:49 | 2765768 smiler03
smiler03's picture

Mars, the food company, reduced the size of a "Mars Bar" in the UK (to 58 grams), ostensibly to help combat obesity. How noble of them. Very soon afterwards they launched the "Mars Bar Duo". Two bars in one packet, which by it's name they insisted was marketed at two people. The two together (80 grams) were bigger than an old one but not as big as two new ones. (Could you follow that?).

My point is that somehow this was seen as purely to help combat obesity and nothing to do with profit or inflation. How stupid do they think we are?

Amazingly enough this is all covered in a wikipedia article.

Wed, 09/05/2012 - 19:03 | 2766164 Dr. Sandi
Dr. Sandi's picture


How stupid do they think we are?

An excellent question. Go visit Wal-Mart for the answer.

Wed, 09/05/2012 - 20:02 | 2766392 silverserfer
silverserfer's picture

even worse is that fucking Hershey's "Air delight" chocolate with delicious air bubbles inside. OOOOOOH! 

Wed, 09/05/2012 - 15:09 | 2765467 Shameful
Shameful's picture

The people who say there is no inflation, I wonder if they shop.  Inflation is an increase of the monetary supply, and the base monetary supply has exploded in most of the developed world over teh past few years.  Naturally stories of natural disasters "explain" why prices are up.  But the real question is once these natural disasters pass will the prices come down or will it be the new normal?

Don't get me wrong I want people to think there is deflation.  I want everyone and their brother to believe and buy US treasury paper, gives this guy more time to get his ducks in a row.

Wed, 09/05/2012 - 13:46 | 2765077 Peter Pan
Peter Pan's picture

I agree with the writer's basic proposition of buying silver and gold to preserve buying power, but he does not explain what high inflation is nor the reason why gold and silver would not also rise in a high inflation environment. After all, isn't that the point of investing in gold and silver?

Wed, 09/05/2012 - 13:51 | 2765101 DosZap
DosZap's picture

gold and silver would not also rise in a high inflation environment. After all, isn't that the point of investing in gold and silver?

Yup, but the VALUE of both will go up, in either deflation, or inflation............contrary to common beliefs.

Don't believe it, check the Great Depression, Cash was king, and guess what it was made of, and backed by.

Wed, 09/05/2012 - 13:56 | 2765132 Peter Pan
Peter Pan's picture

Cash is king?
I must have misread the history of Weimar and Zimbabwe.
The Great Dpression?
I must have misread that bit about how gold was revalued by over 50% by presidential decree.

Wed, 09/05/2012 - 13:46 | 2765078 Sanksion
Sanksion's picture

no table for tungsten ?

Wed, 09/05/2012 - 19:05 | 2766174 Dr. Sandi
Dr. Sandi's picture

Since they're phasing out incandescent light bulbs, they need a new market for tungsten. So why not use it as a gold substitute?

After all, we have paper gold that people have made fortunes buying and selling. Tungsten gold needs to stop hiding in central bank vaults and come out into the legitimate market.

Wed, 09/05/2012 - 13:47 | 2765083 DosZap
DosZap's picture

All was well, until you check into their COMPETITIVE sources pricing(not competitive),and now they are in it, and have been the the middlemen for their sources, so they are now considered In Da Bidness.

Inflation by the technical term is an excess amount of currency IN the system.

Costs of living in our case now is due to higher prices due to shortages, and fewer sales, and vendors making extra profit.

This all starts in the fields of the world,and our farms.

When their costs go up for feed/grain, the cost for everything that it's used in/for goes up, and the animals that eat it do also.

One would be wise to (if not already) have a second large freezer/refigerator and stock accordingly.People my (Fam) thought I was nuts 2-3yrs ago when I started buying excess food.( I knew my kids wouldn't, so I will be feeding them as well,dumb asses).

Not laughing now, as an example, pure white Albacore Tuna(not the cheap crap,Sunkist/Chicken of the Sea),has gone up from $7.99 per 6 cans, to $14.00 per 6 cans, and that is at a local Costco.

In less than two years.


Wed, 09/05/2012 - 14:11 | 2765224 Mr Pink
Mr Pink's picture

Tuna can go up as much as they want . We arent supposed to eat more than one can a week because of the high mercury content. Somehow we have managed to ruin one of natures perfect foods....

Wed, 09/05/2012 - 15:40 | 2765557 mendolover
mendolover's picture

And don't forget the added value in that Pacific tuna courtesy of Fukishima.

Wed, 09/05/2012 - 15:45 | 2765577 DosZap
DosZap's picture

Bought all mine b4 the Fukedshima.

Wed, 09/05/2012 - 16:56 | 2765787 smiler03
smiler03's picture

@ Mr Pink.  Advice from the UK Food Standards Agency is this (I am certainly not endorsing them, merely quoting):

"Yes, everyone can eat tuna. But the mercury that it contains means that the Agency is advising that if you are pregnant or intending to become pregnant, you shouldn’t eat more than four medium-sized cans or two fresh tuna steaks per week."


"High levels of mercury can affect anyone, but while no one else over 16 years of age needs to avoid shark, marlin and swordfish, the Agency does advise that people should not eat more than one portion of any of these fish once a week."

Wed, 09/05/2012 - 20:30 | 2766484 Cathartes Aura
Cathartes Aura's picture

just for the record, the US FDA, back in 2004, guidelines:


  1. Do not eat Shark, Swordfish, King Mackerel, or Tilefish because they contain high levels of mercury.
  2. Eat up to 12 ounces (2 average meals) a week of a variety of fish and shellfish that are lower in mercury.

    • Five of the most commonly eaten fish that are low in mercury are shrimp, canned light tuna, salmon, pollock, and catfish.
    • Another commonly eaten fish, albacore ("white") tuna has more mercury than canned light tuna. So, when choosing your two meals of fish and shellfish, you may eat up to 6 ounces (one average meal) of albacore tuna per week.

(and I doubt this is accurate, given the source, ^^)


Wed, 09/05/2012 - 22:16 | 2766755 DanDaley
DanDaley's picture

The hell with tuna, just eat sardines...King Oscar are the olive oil. 

Do NOT follow this link or you will be banned from the site!